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Contemporary Strategies for Modern Landlords

By Jamie Richardson | October 12, 2023

Demand fluctuation, tenant retention, and soaring costs drive significant challenges for both residential and commercial rental landlords. As a landlord, setting affordable yet competitive rates and creating a well-facilitated space for tenants is paramount to success.

So, what’s the best way to maintain this balance?

Read on as we summarize modern impacts on the rental industry, and describe four key strategies that could help you meet the demands of the current landscape.

How Has the Rental Industry Changed? 

Technology, commercial opportunities, and the renter’s needs significantly impact the rental industry. Here’s how: 

  • Residential units require innovative technology like updated heating, cooling, and ventilation, and energy-efficient appliances gain greater traction
  • Commercial properties like coworking spaces, hotels, and apartment blocks maintain demand, encouraging landlords to venture into new markets
  • Renters who work remotely, or on a hybrid schedule, typically seek larger spaces with more rooms

Although proximity to community hubs, grocery stores, and parking remains essential, an increasing numbers of renters are moving to suburban and rural locations - here’s why:

  • Reduced need for proximity to workplaces in cities: Between 2019 and 2021, remote working increased by 198%
  • Unaffordable rental costs in cities: The COVID-19 pandemic shook the industry, pushing soaring prices. Data in 2023 shows pre-pandemic rent averaged $1,000, while post-pandemic costs became $1,460

You can protect yourself during this shift by investing in residential and commercial property; diversifying your portfolio reduces the risk of financial loss and maximizes income and improves your ROI.

Coworking spaces offer lucrative opportunities, with the coworking office space market expected to rise by 11% between 2023 and 2028. 

5 Strategies for Modern Landlords

Understanding trends in the rental industry can help you develop strategies that make your property a prosperous source of income capable of withstanding significant adjustments in the future. Here are five strategies to consider:

1. Implement Modern and Convenient Amenities

Photo by Tierra Mallorca on Unsplash

Modern amenities offering security, supporting daily living, and facilitating new work habits are key to building an appealing listing. Here’s a breakdown:

  • Security: Entry alarms, access controls, and modern locks hold curb appeal and evoke a sense of security. Smart locks, such as KwikLock, prevent tenants from duplicating keys. Commercial landlords should also consider biometric controls using fingerprints or facial recognition, reserving entry from authorized users
  • Remote Work: High internet speeds of 100mbps are sufficient for remote workers. The American Apartment Owners Association highlighted a study showing that multifamily property landlords could increase income per apartment by 11% when installing fiber optic connection; additionally, furnished property owners could provide desks with storage, multi-functional rooms (used as a bedroom or study), and conveniently placed electric outlets
  • Amenities: Between 2022 and 2023, electricity prices rose by 10.2%. Installing energy-efficient fridges, cookers, solar power, heat pumps, LED lights, and vinyl windows gives your property a competitive advantage over those without modern facilities

2. Screen Tenants and Use PropTech Tools

Background screening helps landlords evaluate tenant’s ability to place on-time payments, treat the property respectfully, and comply with the tenancy agreement. Checks evaluate a tenant's:

  • Credit score and history
  • Previous evictions
  • Rental history
  • Criminal record
  • Employment status
  • Income verification

Streamline the process and protect users’ information using highly-rated digital screening services like RentPrep; results help you assess the risk associated with each tenant. For example, data can help you determine whether a tenant has sufficient funds to cover the rent, or the likelihood of losing a primary income stream based on employment patterns.

While the worst is thankfully behind us, it’s good to keep the effects of the COVID-19 pandemic in mind; around 8.8 million renters fell behind on payments because of rapidly increasing costs and limited access to workplaces. 

3. Resolve Maintenance Issues Promptly

Photo by Tierra Mallorca on Unsplash

Although inflation dropped by over 3% between 2022 and 2023, it’s still double the average pre-pandemic rate of 2.6%. These figures mean renters are seeking longer-term properties where they’ll stay. 

Maintain the property by doing the following:

  • Prevent and react to leaks quickly
  • Respond to queries about mold, condensation, or draft promptly
  • Ensure regular fire alarm checks
  • Tend to reasonable wear and tear 
  • Fix appliance failure quickly. 

Between tenancies create a home inspection checklist, preventing oversights on the property’s structural integrity, warmth, and ventilation, for example.

Connect with trusted contractors who can visit your properties at short notice to display quick incident response time. Fixing issues at the root cause could also save you money in the long term; patch-work means the problem is likely to return at a later date, causing frustration among your tenants. 

4. Analyze Common Prices

In many states like New York and Indiana, you can raise the rent as often as you like, although some regulations require at least 30 days of written notice if costs rise by 5% or more.

If you want to raise your costs without deterring your tenants, consider raising them alongside the inflation rate. When looking for new tenants, review seasonal changes; peak demand usually occurs between May and September. Here, your higher prices are competitive, but demanding tenants are more willing to pay.

5. Get a competitive mortgage

In the current economic climate where interest rates are notably high, landlords with buy-to-let portfolios need to be shopping around and comparing buy to let portfolio mortgages on the market - you can’t afford to be paying higher rates with the current economic squeeze.

Use a good mortgage broker if you’re unsure. 

Given the high interest rates, even a slight difference in percentage points can significantly impact your bottom line. You can either choose to consolidate their portfolio with a single lender who offers a competitive rate, or strategically split their properties across multiple lenders to capitalize on the best rates for different types of properties.

Regularly reviewing your mortgage arrangements and comparing different options is never more important than in a high-interest environment.

Final Thoughts

Current trends and statistics show renters seek longer-term accommodation with contemporary facilities supporting high-level security, functional appliances, and healthy living conditions. The pandemic’s effect on work habits has influenced renters’ needs, so adjusting your properties to meet demand and ongoing maintenance and responsive communication is key to tenant retention.

Jamie is a 5-year freelance writer who enjoys real estate. He is currently a Realty Biz News Contributor.
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